Prime Minister Anthony Albanese held a meeting of national cabinet on Thursday, his third since the start of the Iran war that effectively closed the Strait of Hormuz and sent global oil prices skyrocketing.
Australia now has 46 days of petrol in its stocks, 10 days more than when the US and Israel started launching strikes on Iran, according to Mr Albanese.
"The reality remains, of course, that the strait is still closed and has been closed now for two months, we're in deeply tumultuous and turbulent global times," he told reporters in Sydney.
Energy Minister Chris Bowen said the government was doing everything it could to lock in fuel supply.
"Australians who are looking at the forward supply and making decisions can know that as well as these things can be forecast, Australia is well placed," he said.
Mr Albanese said he would meet state and territory leaders again in coming weeks to ensure co-operation across the country.
Forecasts suggest Australia's economy could take a massive hit if disruptions to the Strait of Hormuz continue.
Modelling from EY and Parthenon released Thursday shows the country's GDP could be $42 billion lower if the strait remains closed for most of 2026.
Investment would be down by $54 billion and household consumption lowered by $70 billion under a severe disruption.
Even if the conflict in the Middle East resulted in a disruption less than three months, the GDP would still be $7 billion lower.
"Global oil price increases are flowing quickly into transport, logistics, mining, agriculture, construction and manufacturing costs, with fuel acting as both a direct input and an embedded cost across supply chains," EY's regional managing partner David Larocca said.
US President Donald Trump says Iran is collapsing financially and short of cash, suggesting the regime wants trade to resume through the Strait of Hormuz.
"They want the Strait of Hormuz opened immediately - starving for cash! Losing 500 Million Dollars a day," he said in a post on his platform Truth Social.
Mr Trump also flagged an indefinite extension of the ceasefire in Iran.
The strait - which before the war carried about a fifth of the world's oil - has been effectively closed after US and Israeli launched strikes on Iran in late February.
The closure has left countries scrambling to find new supplies of oil and refined fuels, prompting Australia to seek more shipments from its neighbours in Asia.
In response to the global oil shock, Labor slashed the fuel excise - shaving 32 cents a litre off the price of petrol and diesel.
The three-month halving of the tax is due to expire at the end of June, but government officials are not ruling out extending the policy if the conflict in the Middle East continues to disrupt global supplies.
24°C